Three key misconceptions Certain beliefs about management company administration may have been true in the past, but no longer are the case. Internal expense ratios atPrivate equity firms show surprisingly wide variability. That’s why benchmarking expense categories provides useful information about peers’ average spend on back- and middle-office capabilities, information that can raise important strategic questions as management companies increasingly face heightened scrutiny to drive efficiencies and comply with new regulations, all while scaling their business. Gen II’s survey of management companies’ core expenses categories, which captures expense percentages across a range of firm sizes, provides a fresh view into how firms prioritize their spending. While no twoPrivate equity firms are exactly alike, they all share a set of common costs to operate their business, including compensation, technology and professional fees. Given the range of expenses among the various firm categories, it’s clear why management companies are under the microscope. It’s important for a firm to understand where they sit on the trend line to make the case either for increased investment in certain areas or to get a sense of where they may be overspending and committing precious resources that could be better served in other areas.